- (1.) This judgment shall dispose off Civil Appeal No. 2565 of 2005 directed against the judgment of the High Court of Bombay in Writ Petition No. 1414 of 2004 dated 29.06.2006 and Civil Appeal No. 7574 of 2005 directed against the judgment of the High Court of Uttaranchal at Nainital in Civil Misc. Writ Petition No. 606(M/B) of 2002 dated 17.10.2003. The point involved being the same, the appeals are disposed off by a common order.
(2.) By the impugned judgments, the High Court of Bombay and Uttaranchal have upheld the vires and constitutionality of SEBI (Stock Brokers and Sub Brokers) Rules and Regulations, 1992 (for short "the Rules & Regulations of 1992). The facts are taken from Civil Appeal No. 2565 of 2005. Although in the writ petition several other points were also taken but at the time of argument before the High Court, the learned counsel appearing for the writ petitioners confined his submissions to the question of vires of the rules and regulations only.
(3.) Principal challenge to the Rules & Regulations of 1992 is based on the contention that the Rules & Regulations were not laid before each Houses of the Parliament as mandated by Section 31 of the Securities and Exchange Board of India Act, 1992 (for short "the Securities and Exchange Act). It will therefore be essential to reproduce Section 31 of the said Act as the entire argument is placed on the requirement of the said Section. Section 31 reads as under: "Rules and regulations to be laid before Parliament.--Every rule and every regulation made under this Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule of regulation or both Houses agree that the rule or regulation should not be made, the rule or regulation shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule or regulation.";